China posts first import growth since pandemic, exports
also up
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[July 14, 2020] By
Stella Qiu and Gabriel Crossley
BEIJING (Reuters) - China's imports in June rose for the first time
since the coronavirus crisis paralysed the economy, as government
stimulus stoked demand for commodities, while exports, fuelled by
medical goods, also rose in a sign the recovery is gaining traction.
Beijing has doled out aggressive stimulus to support domestic demand
even as a resurgence in coronavirus infections around the world has
raised questions about the strength of a rebound in global economic
activity.
China's imports in June rose 2.7% from a year earlier, customs data
showed on Tuesday, confounding market expectations for a 10% drop. They
had fallen 16.7% the previous month.
Exports also rose unexpectedly, up 0.5%, suggesting global demand is
starting to pick up again as many countries begin to ease tough
anti-virus measures that have pushed the world's economy into its
biggest slump in almost 90 years. Analyst had estimated a 1.5% drop
following a 3.3% decline in May.
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"The significant improvement in China's imports is an indication of the
country's accelerating economic recovery, which has been mainly driven
by substantial increases in investments in sectors such as real estate
and infrastructure," said Boyang Xue, a China analyst at consultancy
firm DuckerFrontier.
Indeed, iron ore imports jumped to the highest in 33 months in June, the
trade data showed, fuelled by rising shipments from miners and robust
demand. Crude oil imports also hit an all-time high amid bargain hunting
by Chinese refiners as oil prices collapsed.
Martin Rasmussen, China economist at Capital Economics, expects China's
imports will continue to improve as a ramp-up in fiscal stimulus boosts
domestic demand.
China's imports from the United States rose 11.3% in June, reversing a
double digit declining trend seen after the coronavirus outbreak.
"Faced with difficulties presented by the sudden epidemic, we're still
honouring our commitments and implementing the (trade) agreement,"
customs spokesman Liu Kuiwen told reporters on Tuesday.
U.S. President Donald Trump said on Friday he was not thinking about
negotiating a "Phase 2" trade deal with China as relations between
Washington and Beijing have been "severely damaged" due to the
coronavirus pandemic and other issues.
China's trade surplus with the United States widened to $29.41 billion
in June from $27.89 billion in May.
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![](../images/071420PICS/busine49.jpg)
Luo Jingjing, owner of
Yiwu Fuye Christmas Crafts Co. works in her Christmas products shop
at the Yiwu Wholesale Market following an outbreak of the novel
coronavirus disease (COVID-19), in Yiwu, Zhejiang province, China
June 2, 2020. Picture taken June 2, 2020/File Photo
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EXPORTS RISE
China's economy is recovering from a sharp 6.8% contraction in the first
quarter, but the recovery remains fragile as global demand falters due to social
restrictions and still rising coronavirus cases. Chinese consumption is also
subdued amid job losses and concerns about a second wave of infections.
The country's export performance however has not been as severely affected by
the global slowdown as some analysts had feared, supported by shipments of face
masks, personal protective equipment and computers.
"The reopening of major western economies and elevated overseas demand for PPEs
and masks supported Chinese exports in June," said Xue from DuckerFrontier. "In
addition, production disruptions in China's trade competitors also helped to
shift some orders to Chinese exporters."
Despite the partial reopening of Western economies in the past few weeks, some
countries are reimposing various lockdown measures to battle a resurgence in
coronavirus cases.
"Looking ahead, the boost from shipments of masks, medical products and
work-from-home equipment, which are still growing at over 30% y/y, will continue
to fade and weigh on exports," said Rasmussen from Capital Economics, adding
that exports would start to contract again before long.
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Worsening U.S.-China relations, shrinking global demand and disruptions in
supply chains are also likely to pressure the trade outlook over the long run,
Institute of Advanced Research at Shanghai University of Finance and Economics
said in a report on Saturday.
The country's trade surplus for June stood at $46.42 billion, compared with a
surplus of $62.93 billion in May.
(Additional reporting by Lusha Zhang; Editing by Jacqueline Wong)
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